A nice article in the Boston Globe this past week covered how three well-known area companies succeeded during the last recession. They are Staples, Akamai and Thermo Scientific.
The lesson from Staples can apply to anyone. Chief executive Ron Sargent told the Globe that during the 2001 recession, he focused on three things:
- Take care of the customer
- Pare expenses wherever possible
- Continue to invest in the future
Sargent said, “You can’t just do two of the three. You have to do all three.”
For Staples, taking care of the customer meant fully staffing stores at peak shopping hours. “It takes a long time to get a customer,” he said, “but you lose them quickly.”
Taking care of the customer is core to Staples’ mission. If you swap the term “member” for “customer” in this context, and you have a good template for leading associations through this recession. But assuming a member focus can be tricky, because this could drag you into doing something just because a handful of members want it. After all, couldn’t t that be called member service?
Well, not really, if you keep in mind rule #2 – pare expenses. Which is what Staples did. During the 2001 recession, Staples closed 31 unprofitable stores. But at the same time, it opened another 60 in fast-growing markets. Obviously, this improved the overall bottom line.
The other message in this story – loud and clear – is the utter necessity of continuing to invest in the future. For Akamai, it meant investing in new technologies to serve its new user base. For Thermo, it meant buying new companies and shedding those in peripheral industries. For you, what does investment mean? It doesn’t mean cut your expenses until you bleed. It means cut the peripheral expenses, and grow what is your core.
As association leaders, we have a duty to the members. And to the bottom line. And to the future. This isn’t easy to keep these three plates spinning, but that’s what they pay us for.
Staples did it; so can you.